However, check with a financial advisor to decide if you really want to give up that much control of the company. For example, if your corporation is worth one million dollars, and an investor puts $200,000 into the company, the investor could be entitled to receive one-fifth, or 20%, of the corporation's shares. Investors often receive stock in proportion to the amount they have invested in the corporation. Determining the Amount of Stock an Investor Gets Make sure your company complies with all applicable laws. Investors have to obtain certificates from the company's transfer agent, or from their broker, usually for a fee.Ĭheck with a legal or financial advisor to see if your state still requires you to issue stock certificates to your investors.Paper stock could be stolen or lost, requiring replacement.You have to keep track of the shares at all times in a ledger book or on a computer.You have to ensure the investors sign the certificates.You have to ensure the company mails the certificates to the investors who own them.There is tedious clerical work involved in distributing paper certificates.While some of your investors may want stock certificates, issuing and distributing them burdens your company because: Disadvantages of Issuing Stock Certificates A corporate kit usually contains a handsome binder, a ledger, some stock certificates, and a corporate seal. If, however, you do want your company to issue stock certificates, you can get corporate business supplies online by using a corporate kit. Many companies encourage their investors to turn in their stock certificates, replacing them with newer indications of stock ownership.

The company then mails the certificates to the investors.Ĭorporations rarely issue stock certificates anymore.

It also contains the name of the company, the official signature from an officer of the company or someone in a similar capacity, and an official company seal. Stock certificate paper is a paper record that shows the investor owns the shares and how many shares the investor owns. Private companies may still issue stock certificates, but many of these companies also are switching over to either electronic or digital shares.Ī stock certificate is a piece of paper that shows that the investor owns shares in the company. While some people still want to have something tangible, such as stock certificate paper, public companies have moved to a different system of issuing their stock.

If you are an owner of a corporation, one of the decisions you must make is whether to issue paper stock certificates or whether you can show investment in the corporation in another way.

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